During the economic downturn of the past year, companies have taken many actions to cut costs, including cutting salaries and bonuses, mandating unpaid time off, and laying off staff. While many organizations may be finished with layoffs at this stage, salaries and bonuses have yet to recover. Employers must remember, regardless of economic conditions and especially in the wake of downsizing, your most talented employees always have options.
Many of these employees may be feeling undervalued by their current employers because of actions taken in the past year or so, and are now exploring their options as signs of recovery begin to emerge. Employee flight risk may be low during the depth of an economic crisis, but it increases faster than the recovery of the economy. One look at open positions on various job sites indicates a huge demand for contract recruiters, which means that employers are starting to hire. Rather than looking at the employees on the unemployment line to fill their newly created positions, companies that are emerging and preparing for growth are turning to recruiters to find the best qualified candidates, who are often individuals who are actively employed. Which means, they could be calling employees who are working for you.
During the initial phases of a company’s economic crisis, your best employees are likely to identify with the problems facing the company and understand they have to take a hit along with everyone else. But when the company is no longer struggling, those employees will expect to be rewarded for their loyalty. From their perspective, if they suspect the near future is going to bring more of the same in terms of limited promotions, reduced bonuses and salary freezes, they’re more likely to consider external options and take those calls from recruiters.
So what can you do to minimize the risk of losing key talent? Assessing your risk is the first step and you can do this by identifying the key people and the key roles in your organization. Who are the top performers that you need in place to keep your business running smoothly? What is the risk that each of these individuals will leave? And who are the employees whose departure would not necessarily have a negative impact on the organization?
When determining who falls into each of these categories, don’t just look at the top roles or top people in the organization. Key talent may be different in times of growth vs. times of crisis. Individuals who can think strategically are often the ones that are most critical when business is booming. When companies are trying to navigate through tough times, it’s often the employees who are operationally focused that are most important. Think about the talent that you need today to get through the crisis as well as who you’ll need tomorrow to move ahead. Look throughout your organization at all levels to identify the key people and the key roles you need to retain to ensure your organization has the top talent it needs going forward.
Then put a plan in place to retain that top talent. Take a look at compensation for those employees and consider establishing retention plans for key employees, with bonuses tied to specific milestones or timeframes; restoring salary levels and bonuses to pre-economic crisis levels for these individuals; and/or reviewing salaries against market data to ensure you’re remaining competitive. And provide your key employees with training, promotions or opportunities to work in other areas of the business in order to develop their skills and knowledge base.
Beyond all of these recommendations, the bottom line in terms of retaining top talent is communication. You need to let your best people know, in no uncertain terms, that they are valued and needed. Even if you don’t have the financial resources right now to provide monetary rewards, your top employees will at least know that you’re committed to retaining and developing them, that you appreciate them and their commitment to your company, and that the rewards will come as economic conditions improve.
